Health reform starts to take shape in Iowa; big questions remain

By Sheena Dooley | Iowa Watchdog

DES MOINES – One year after the historic U.S. Supreme Court ruling that upheld the nation’s largest social net expansion in decades, its impact still remains unclear.

Iowans, however, have begun to get a clearer picture of what Obamacare will mean for them, despite the questions that remain.

Here’s what is known: Those who suffer from pre-existing conditions won’t have to worry about being denied health insurance because of their illness. The law also requires insurance companies to scrap lifetime maximums that, when reached, mean the insurance company doesn’t provide anymore coverage. It will also mean millions of additional dollars for mental health care.

State Sen. Jack Hatch calls Obamacare one of the most important pieces of legislation in 45 years.

Additionally, the state will expand its Medicaid rolls by 150,000 Iowans to include individuals 100 percent or below the poverty line. Those living at 101 to 138 percent above that line will be given money to purchase insurance through a state healthcare exchange. The change takes effect July 1 of next year.

The expansion will be fully funded by the federal government for the first three years. After seven years, Iowa kicks in 10 percent. It’s estimated the 10 percent contribution will amount to $63 million dollars. But that’s not a given, according to state officials. It will depend largely on how many people qualify and the cost of the care they receive.

Enter uncertainty number one.

A state health-care exchange is starting to take shape. Iowans who are uninsured or want to change insurance plans can shop for new coverage in the exchange, which includes platinum, gold, silver and bronze plans, said State Sen. Jack Hatch, D-Des Moines. He described it as the Travelocity of insurance plans. So far, at least three insurance providers have agreed to participate in the exchange, although the state has yet to release their names.

The exchanges must be up and running by 2014, under the federal law.

Other states with already established exchanges have seen premium costs go down by as much as 30 percent, said Hatch, who has been a driving force behind healthcare reform at both the state and federal level. And the law requires insurance companies to maintain the level of coverage they offer, as well as keeping co-pays and deductibles at reasonable levels, he said.

But it’s not clear if that will happen in Iowa. It also remains to be seen whether law’s assumption that the exchanges will pay for themselves (i.e. administrative costs to maintain them) within three years will hold true.

Enter uncertainty number two.

The law carries a significant compliance section – for states and health insurance providers – to ensure it’s properly implemented and followed, Hatch said. And that comes at a cost.

Under the law, those costs will be covered by savings from health providers not having to provide “charity care” to the sick who cannot afford to pay their medical bills because they lack insurance, along with other measures to contain costs within the medical care system.